By Foster Obi
While 2022 was notably a miserable year for sovereign wealth funds, as it was for all diversified institutional investors, Managing Director, Nigeria Sovereign Investment Authority (NSIA), Aminu Sadiq, said that net assets growth of the agency moved from N156 billion in 2013 to N1.017 trillion as of the end of 2022.
He also said that the agency invested over $500 million in domestic infrastructure as well as over one billion dollars in third party investment.
Euro Money report, released early in the year asserts that 2022 was the first year ever that sovereign wealth funds shrank in value.
The report specifically estimates that Global Sovereign Wealth Funds (SWF’s) assets under management (AUM) , fell from $11.5 trillion in 2021 to $10.6 trillion in 2022, and public pension funds from $22.1 trillion to $20.8 trillion, amounting to a $2.2 trillion overall impact.
“These are paper losses and some of the funds will not see them realized in their role as long-term investors,” the report said.
However, Mr. Aminu Sadiq, the Managing Director of NSIA, during an investigative hearing conducted by an ad hoc committee of the House of Representatives examining the NSIA’s operations in Abuja, emphasized NSIA’s robust investment in infrastructure across vital sectors such as agriculture, healthcare, and power.
Also in Financial Market, the agency has fostered the development of over ten institutions and platforms, all aimed at enhancing the financial market ecosystem.
In Solar Project, NSIA is currently working on a solar panel initiative expected to generate over 500 employment opportunities.
The MD disclosed that 13,504 affordable housing units are presently under construction while the Authority is also offering support to over 236,000 farmers.
At the hearing, Mr. Kolade David, the President of the Association of Local Governments of Nigeria (ALGON), one of shareholders of the Fund recognized NSIA’s significant contributions, particularly in the realms of health and education.
Rep. Ademorin Kuye, who chairs the committee, clarified that the investigation’s primary objective is to ascertain the agency’s compliance with the statutory provisions of its establishing law.
He further expressed the House’s intention to transparently address Nigerians’ concerns regarding the management of the agency’s funds.
The lawmaker said, if the need arises, they would visit sites of projects being handled by the authority to ensure value for money. The committee also commended management and staff for the detailed responses they provided, which, according to the lawmakers, shows a high level of governance and transparency
NSIA reported a profit after tax of N96.9 billion at the end of 2022 down from N146.9 billion a year earlier. The decline came from a drop in financial assets from FVTPL, fair value through profit and loss.
Also speaking at the hearing, Lateef Shittu, representative director-general of the Nigeria Governors Forum (NGF), said the states were satisfied with the operations of the NSIA.
According to Shittu, the states are real owners of the NSIA since they control over 54 percent of the shares of the agency alongside the local government. “The states and local governments are the real owners only of NSIA because we are the majority shareholders,” he said.
Shittu said in 2022, the governors requested a presentation on the operations of the NSIA from the management, adding that they were “satisfied with the presentation and what was being done”.
While responding to the Rep. Committee chairman for details of utilisation of the public funds that accrued into the NSIA coffers since inception in 2011, the NSIA MD’s breakdown of the approved fund showed that the sum of $250 million capital was approved by the 1st Governing Council of National Economic Council (NEC); completed Early Works & Negotiation of concession agreements for 2nd Niger Bridge; while the 2nd NSIA Board also approved $250 million capital injection.
According to the statistics of core assets released to the Ad-hoc Committee, the sum of $285.8 million is accrued into the Stabilization Fund account; $899 million accrued into Future Generation Fund while $1 billion has so far accrued into the Nigeria Infrastructure Fund coffer, respectively.
The Organization was also appointed to serve as Investment Manager for the $200 million Debt Management Office’s funds for Gas-to-Power infrastructure projects as well as Investment Manager for the N200 billion on behalf of NESI Stabilization Strategy Limited.
According to the MD, the Organization received the sum of $1.75 billion funding, out of which the sum of $150 million was disbursed to the Government to cushion the economic stress caused by COVID-19 pandemic.
He disclosed that the agency has developed a 10MW solar panel project with over 500 jobs to be created directly/indirectly; 13,504 housing affordable housing units under construction; supported over 236,000 farmers through agro projects, commissioned and Operationalized $11 million Cancer Treatment Centre and pre-operational activities on $11 million diagnostic centres in Kano and Abia; commenced deployment of $650 million in Presidential Infrastructure Development Fund projects as well as development of a 1OMW solar power plant in Kano State; the largest solar power plant in West Africa.
The Organization also approved $100 million in the JV agreement-OCP ammonia project (MIPL) in 2021, a $1.4 billion Ammonia and DAP project in JV with OCP; commenced 2nd Niger Bridge project; injected $550 million into NSIA to be managed on behalf of NBET and DMO; invested $100 million in Savannah Petroleum (Formerly Seven Energy); signed MoC with six Federal healthcare institutions across country through the NSIA’s healthcare subsidiary; commenced Presidential Fertiliser Initiative via NAIC-NPK Ltd; $200 million Agriculture Fund with UFF Agri Fund of South Africa; $500 million Real Estate Fund with Old Mutual Africa Property Management Company of South Africa; secured approval to invest in pre-privatisation phase of the Nigeria Commodities Exchange; commenced the formation and operationalization of the Presidential Infrastructure Development Fund (PIDF); began development on ammonia plant with OCP Group of Morocco; invested $25 million in Project Panda, an agriculture project North of Abuja; invested $5 million Babban Gona in smallholder farmer in Northern Nigeria and returned $417.46 million to the Nigeria Bulk Electricity Trader (NBET) of $67.46 million over a 4-year term.
Picture: Mr. Aminu Sadiq, the Managing Director of NSIA